By John Ballard
The Kaiser people published another report (4 pages, pdf) spelling out some unhappy realities about the next generation of Medicare beneficiaries. Check out the whole piece, charts and all. But here is the conclusion.
While a small share of the Medicare population lives on relatively high incomes, most are of modest means, with half of people on Medicare living on less than $21,000 in 2010. The typical beneficiary has some savings and home equity, but asset values are highly skewed and are significantly higher for white beneficiaries than for black or Hispanic beneficiaries. The income and assets of Medicare beneficiaries overall are projected to be somewhat greater in 2030 than in 2010; yet, only a minority of the next generation of beneficiaries will have significantly higher incomes and assets than the current generation, with much of the growth projected to be concentrated among those with relatively high incomes. Racial disparities in both income and assets are projected to persist for the next decades.
As policymakers consider options for decreasing federal Medicare spending and addressing the federal debt and deficit, this analysis raises questions about the extent to which the next generation of Medicare beneficiaries will be able to bear a larger share of costs.
The bubble in which many people live is becoming smaller and less comfortable as the population of uninsured, unemployed and elderly people with little or no safety net continues to swell.
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[To make a point, dear reader, I'm shifting gears here from Medicare to Medicaid. Don't confuse the two, but know that there is a population of "dual-eligibles" that will be mentioned soon when those infamous closed -door negotiations are over.]
Last week's news comparing various Medicaid policies was a splash of ice water in the face, but states needing to heed the lesson are the very ones less likely to make any course corrections.The most dramatic study comes from Oregon which, when funds got tight, used a lottery to determine Medicaid eligibility rather than pinching off the lifeline for everyone a little at a time. The result is a textbook comparison of the impact of Medicaid on the lives of those who are covered when compared with those not covered.
As a side benefit, the lottery system set up the perfect conditions for conducting the �gold standard� of scientific research; a randomized controlled trial. With funding coming primarily from the National Institute on Aging, researchers spent a year collecting data from hospital records, mail surveys and other sources. They compared outcomes in those low-income adults randomly selected to receive Medicaid coverage to outcomes in the applicants who remained uninsured. Their findings were irrefutable: �expanding low income adults' access to Medicaid substantially increases health care use, reduces financial strain on covered individuals, and improves their self-reported health and well-being,� according to the paper. Specifically, adults with insurance coverage were 55 percent more likely to visit a doctor, 30 percent more likely to be admitted to the hospital and 15 percent more likely to take prescription drugs, according to the NBER paper. There were also measurable gains in use of preventive services; with a 60% increase in women over 40 having a mammogram, a 45% greater likelihood of having a pap test and a 20% greater chance of having blood pressure checked. The impact of insurance on mortality rates and use of emergency rooms were not significant in this particular study.
Having insurance also had a real impact on the financial health of the low-income adults newly covered by Medicaid: They experienced a 25 percent decline in having unpaid medical bills sent to a collection agency and a 35 percent decline in out-of-pocket medical expenditures. For individuals whose income is below $11,000/year, these financial impacts are substantial and helped reduce stress.
Why is this research so important? The National Bureau authors note that in 2011, �fewer than half of the states offered Medicaid coverage to able-bodied adults with income up to 100 percent of poverty.� Facing budget crises that are even more severe than Oregon�s 2004 shortfall, many states are looking to trim their Medicaid rolls even further or to reduce benefits and reimbursements to providers�among other cost-saving measures. Medicaid is increasingly becoming the target for conservatives at the federal level too, with some legislators calling for a bill to create waivers that would allow states �flexibility� to cut their benefits and others clamoring to turn Medicaid into a block grant program.
Conservatives are in a rush to secure this �flexibility� because starting in 2014, the Patient Protection and Affordable Care Act calls for a mandatory expansion of Medicaid eligibility to all Americans who earn up to 133 percent of the federal poverty level. This expansion, funded for the first year completely by the federal government, is expected to provide an additional 16 million of the uninsured with coverage and to improve the nation�s health while keeping poorer Americans out of the costly and over-burdened safety net system.
The NBER working paper provides clear evidence that having insurance will benefit the poor. And more specific measures of how coverage impacts health are expected to be published in the months ahead. Two years after the lottery process was completed, the researchers conducted in-person interviews and health exams on a subset of their study population�12,000 residents of the Portland metropolitan area (6,000 with Medicaid, 6,000 without). According to the authors, �Results from those data should help shed light both on the longer-run impacts of insurance coverage, and on the impact of insurance on more objective measures of physical health, including biometric measures� like diabetic blood sugar, cholesterol, weight and blood pressure.
Thursday's Morning Edition has the story.
That "dual-eligibles note above refers to a group that has been around for some time, but until PPACA has been one of the unmentionables of the system, partly because Medicare, unlike Medicaid, has not had the same negotiating options.This is especially significant in the case of prescription drugs. Medicare rates are whatever the manufacturer demands, but Medicaid, like Veterans Administration, is able to negotiate for lower prices.
I'm repeating here the conclusion from above.
As policymakers consider options for decreasing federal Medicare spending and addressing the federal debt and deficit, this analysis raises questions about the extent to which the next generation of Medicare beneficiaries will be able to bear a larger share of costs.
I think there is plenty of blood left in the turnip. That blood consists of Medicare paying for procedures and drugs that are ineffective or unnecessary. And yes the insurance companies are doing the same thing. Of course the denial of a drug or procedure will be labeled as "rationing". Nothing could be further from the truth - it's common sense. But of course real rationing is appropriate as well. Does it really make any sense to give an 85 year old a $250K procedure to keep them alive for another three months if they survive the procedure? We spend billions of Medicare $ on chemotherapy that often kills the patient before the cancer would have.
ReplyDeleteYou're right, of course, but we're talking about different "turnips." I was referring to the beneficiary population, many of whom are stretched to the limit, not Medicare resources which as you point out are being disbursed more carelessly than beer at a keg party. I'm waiting to see how much more deeply the "compromise" still under wraps in Washington will cut into the pocketbooks of seniors. Your point about rationing is exactly right. If those with deep pockets want to waste personal wealth on expensive last minute gestures at the end of life, that's a different matter from expecting that tax money should be pissed away part of the resources used.
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